Powder Blue Report

Tuesday, September 30, 2008

Quote Of The Day

Sunday, September 28, 2008

The Markets Will Work...If They Let Them

As I write this post Sunday night, the S&P futures are down 15 points. Tomorrow morning the US House of Representatives will vote on the $700 billion bailout bill. It's clear from the futures indicator that the vote is very much in doubt right now. My sources are saying that they are about 20 votes short right now to pass this thing. Let's hope so. The House is the only hope of stopping this bill. If they do not pass it, I believe the stock markets of the world will almost certainly start selling off...as they should. It's clear that Mr Market needs to go lower to find a reasonable equilibrium. What's not clear yet to me is how low it will go. My prediction is 800 on the S&P and 7500 on the Dow.

Thursday, September 25, 2008

Clandestine Bailout Of Big 3 US Automakers Passes

You gotta hand it to the lobbyists and representatives who engineered a $25 billion bailout for the big 3 US automakers yesterday. While everyone has been rightly concentrating on the mother of all bailouts, another bailout sailed through Congress with nary an opposition. So another $25 billion of taxpayer money is going down the drain to prop up a dying industry. Both McCain & Obama support this idea. It's not their money so what do they care.

Wednesday, September 24, 2008

Another Austrian Economics Lesson For Ben Bernanke...Courtesy Of Ron Paul

Note From Ron Paul About The Bailout

Dear Friends,Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

The events of the past week are no exception.

The bailout package that is about to be rammed down Congress’ throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! “This is welfare for the rich,” he said. “This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters.”

That describes the current bailout package to a T. And we’re being told it’s unavoidable.

The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

• The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.

• Financial institutions are “designated as financial agents of the Government.” This is the New Deal to end all New Deals.

• Then there’s this: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.“ Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this “sadly necessary.” Sad, yes. Necessary? Don’t make me laugh.

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we’re supposedly presented with this November: yes or yes. Now, with a backlash brewing, they’re not quite sure what their views are. A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we’ll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.

Tuesday, September 23, 2008

Tustin City Council Majority Has Run Amok

I've been meaning to post my thoughts on what happened last week at the Tustin City Council meeting regarding their proposed anti freedom ordinance against people parking on the street where they live, but I haven't yet had a chance to put electronic pen to ink because I've been so busy at work. Let me set the stage here. The Tustin City Council is composed of five councilmembers. All five are Republicans, but not all five are friendly to freedom. In fact at least two were openly hostile to Mr Ray Grangoff of the Orange County Apartment Association last week. The Tustin City Council proposed an ordinance to compel their residents to get a parking sticker on their vehicles lest they risk getting towed. I'm not making this up. This is like having a Nazi Homeowners Association on steroids. If you live in Tustin and this passed as it was written, you would have had to go down to the city and beg and plead for a stupid parking sticker to put on your car. That's not much of a hassle or anything(snark). So you had a situation where Mr Grangoff and a few other residents put out hundreds of flyers out made to look like parking tickets. Click here to see a copy of the flyer.This got peoples attention. Low and behold, almost 300 angry residents showed up at the city council meeting wearing bright yellow stickers with "no parking ban" on them and demanded that this ridiculous ordinance be killed. This clearly flustered anti freedom councilmembers Jerry Amante and Doug Davert. These guys are your typical league of cities overbearing politicians that think they're real smart. In reality they're just a couple of politicians masquerading as "conservative republicans". We seem to have a lot of these guys lately here in OC. So Amante and Davert tried to browbeat Mr Grangoff into submission when he was speaking. It didn't work. Here's a choice quote from Mayor Amante...

"the littering of our streets with your disingenuous tripe."

Excuse me Jerry, but how is wanting to park outside where you live "disingenuous tripe"? Here is the link of the video of the event. I wish it was You Tubed, but just fast forward to about one hour and eight minutes into the video to see the fireworks start. It's the September 15th special workshop video part 1 of 2.

Is Hank Paulson A Nigerian Scammer In Disguise?

This is hilarious. I'm sure everyone who gets spam email has taken the time to read some of the ridiculous Nigerian 419 scam emails every day. You know...the ones asking if you will help them transfer millions of dollars out of some bogus bank or Treasury and in return you will get to keep half of the millions. So i just saw this posted over at Lew Rockwell... check it out:

Request For Urgent Business Relationship

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.(what an effing joke!)

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.--The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom. Portfolio risk here means that the paper has no value!

(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act. Who do they think they are going to sell this crap to? Even USC graduates wouldn't buy this paper

(d) Application of Sunset to Mortgage-Related Assets.--The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time until such time as we decide to make another trillion available to buy when this doesn't do anything

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure. we don't have any money, but it will be created out of thin air as per the Federal Reserve playbook

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. don't bother trying to put a check on my power suckas because I just gave myself godlike authority under this act to do whatever I damn well please

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008. this means that all those worthless liar loan, subprime, Alt-A, teaser rate, neg am pieces of crap will now gladly be bought by Uncle Sam

(2) Secretary.--The term “Secretary” means the Secretary of the Treasury.

(3) United States.--The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.

John Campbell Likes Bailouts

I really didn't wanna have to call out my own Congressman for selling out the conservative principles he promised to uphold if elected, but it's obvious the Congressman likes giving away trillions of yours and my tax dollars to people who made bad financial decisions. He has declared war on free markets. He announced today that he will be voting for Hank Paulson's trillion dollar bailout of his Wall Street buddies. These are the geniuses that convinced banks & mortgage brokers to package up their newly created subprime, Alt-A, negative amortizing, teaser rate loans, & every other exotic(or toxic)mortgage and securitize them them to be sold around the world. Now that they have rotted to the core and are causing massive panic on Wall Street, the Congressman thinks its a good idea to bail all of these people out with our money. Since he's declaring war on our wallets, why don't we make life for him real difficult in the upcoming election if he doesn't change his mind. He also voted for the Fannie Mae & Freddie Mac bailouts. I don't know what has gotten into him, but it's safe to say that he is no longer a friend of the taxpayer.

Thursday, September 18, 2008

Ron Paul On The Global Financial Panic

Friday, September 12, 2008

Overdue Makeup Call Coming For OJ Simpson

A jury has been seated for the upcoming Las Vegas OJ Simpson trial. Most of the jury is made up of white people...unlike the all black one back in 1995 that let the murderer go free. Well it's time for a little payback for the "Juice". In sports parlance, it's what's known as the "makeup call". Sometimes in the heat of a basketball, football, or baseball game the refs or umps blow the call. Sometimes its benign, but sometimes it costs the other team the game. So to make up for these "blown calls", the refs will have a makeup call later in the game to offset the bad call from earlier. They missed a hack on one end, and now they're whistling him for an offensive foul on the other. In my opinion, this is going to happen out in Las Vegas. It's obvious that the jury back in 1995 made the wrong call for whatever their motivation was. This is going to be jury nullification in reverse. Pretty soon OJ can look for Ron & Nicole's killer in the Nevada penitentiary system(or he can look in the mirror, LOL).

Friday, September 05, 2008

It's Friday Afternoon...That Can Only Mean One Thing....More Bailouts

Yep right on cue as soon as the markets closed today the Feds announced that they are close to an agreement to bailout Fannie Mae & Freddie Mac. A bailout here a bailout there, pretty soon we're talking about real money. This move has been telegraphed for months. Freddie & Fannie are insolvent. Once again the risks get socialized and the profits privatized. You're welcome Bill Gross. Your crappy investments in Fannie & Freddie bonds are now risk free thanks to the US taxpayer. Of course this will cause more major bouts of inflation with all the money needing to be printed, but who's really counting anymore...the government is not. They ended giving out M3 numbers a few years ago. Oh yeah and for everyone in the 48th CD, let's all go ahead and thank Rep John Campbell for his precious little vote to bailout Freddie & Fannie. After all, we wouldn't want the whole fractional reserve/fiat paper money system to come crashing down. That would be very bad.

Bill Gross Just Yelled "Fire" In A Crowded Theatre

Folks you know this credit crisis is getting real serious when Pimco's Bill Gross aka "the bond king" is calling for the Treasury to bail his ass out of his toxic investments in Fannie, Freddie, & Ginny Mae bonds. The unmitigated gall of this guy to ask the taxpayers for a bailout is breathtaking. What's even sadder is that Hank Paulson will probably do exactly that.

Thursday, September 04, 2008

Ron Paul Colbert Show Appearance Tonight

GOP Roll Call Convention Vote Is A Sham

I was saddened to see the roll call vote at last nights RNC Convention turn into an exercise of raw political power. Who does the RNC think they are...the Orange County GOP Central Committee? They need to learn how to count votes. It's one thing to get beat in a fair fight, but for the RNC to try(and succeed) to silence almost all of the Ron Paul delegates at the convention and pretend there were no dissenting voices in that hall...well it was pretty pitiful to watch. But that's alright, I'm just gonna file this event away in my memory bank and use it to galvanize supporters of our movement...The Campaign For Liberty. It was just so obvious that the McCain people were worried sick that Ron Paul might mess up the script of their well planned silencing of him. The Secret Service is going around confiscating stuff from Ron Paul delegates. They wouldn't even give him access to the floor of the convention! This is a man that raised over $35 million dollars and has brought in hundreds of thousands of young new supporters of the party. Then they had the gall to ask us for our list of supporters. Simply amazing.

On the flip side, I thought Sarah Palin gave a great speech. She has definitely energized our party. I just got home from Minneapolis and I will have a post up about my last couple of days hopefully up by tonight or tomorrow at the latest.